SME house builders can help solve the housing crisis
National Federation of Builders
Paul Bogle, head of policy and research for the National Federation of Builders (NFB), took part to a round table on house building at the Liberal Democrat party conference in Brighton on 19 September. Tim Farron MP, leader of the Liberal Democrats, was among the guests.
Policy makers need to recognise that all house builders are not the same. Volume house builders can fall back on land banks and they also have easy access to markets and other forms of finance. Because SME house builders do not enjoy this level of support, they have gone from making up two thirds of the entire sector in the 1990s to just one third in the present day.
There is an expectation that large house builders will build all the homes we need. This approach, however, will not work for two reasons. Firstly, the private sector builds market homes in order to make a profit. Secondly, volume house builders are already operating at full capacity.
The NFB believes that, in order to build more homes, we must look more closely at the barriers to SME involvement and to the contribution they can make. SME house builders build high-quality homes more quickly because they develop small and infill sites, deemed not economically viable by volume house builders.
Paul Bogle said: “If we’re to support a realistic approach to building more homes, particularly ones that are affordable, we must create greater diversity in the house building market. New entrants need to be supported and experienced SMEs which have scaled back since the recession. We also need to give greater flexibility to local authorities and housing associations to build homes for purchase that are affordable in the sense that the person in the street understands affordable.”
